Understanding Tokenomics: How Projects Use Supply to Drive Value
“Good tokenomics can make or break a crypto project. And bad tokenomics? That’s a rug in the making.” What Is Tokenomics? Tokenomics is the blend of “token” and “economics.” It's the science (and sometimes dark art) of how a crypto token’s supply , distribution , and utility are structured to create and sustain value. Just like a country has central banks controlling inflation and currency issuance, crypto projects set the rules for how their tokens behave. If Bitcoin has a gold-like scarcity model, then Dogecoin is your wild money printer uncle. Whether you’re investing, trading, or building your own project — understanding tokenomics isn’t optional. Key Components of Tokenomics Let’s break it down into digestible pieces: 1. Total Supply, Circulating Supply, and Max Supply Total Supply : How many tokens currently exist (minted). Circulating Supply : Tokens that are actually in the market and available. Max Supply : The cap on how many tokens will ever exist. ...